MCP posts threefold return on Europe play
Mandarin Capital Partners (MCP), a Sino-European private equity joint venture backed by state-owned China Development Bank (CDB), aims to raise Euro1 billion (HK$10.4 billion) for its second fund this year, about three times the size of its maiden fund.
The fund-raising plan comes as the Shanghai-based firm sold a portfolio company in Europe to an Italian fund, giving MCP a threefold return on its original investment, according to its managing partner, Jenny Gao.
MCP said yesterday it was selling a 30 per cent stake in European pharmaceutical company Euticals to Clessidra, an Italian private equity fund, for about Euro67 million.
Based on the purchase price, MCP pocketed a profit of just over three times the original valuation in 2008 when MCP made its initial investment for 54 per cent of Euticals.
After the deal with Clessidra, MCP will still keep a 24 per cent stake in Euticals, whose clients and business partners include global health-care giants Roche and Pfizer.
MCP said feedback on the deal from its institutional investors, also known as limited partners in the private equity industry, had been good.
'Our limited partners in Europe and CDB are both very satisfied with the Euticals deal,' Gao said.
'Three times investment return in the current market is pretty good and that certainly helps us raise more capital for the new fund.'
CDB used to be one of the country's three policy lenders with a mandate to implement Beijing's economic policy - for example, to support infrastructure construction through government-backed loans. But CDB has been keen to transform itself into a commercial bank and has diversified into other areas, including private equity, in recent years.
Despite the recent sale of MCP's stake in Euticals, the firm remained focused on the medical and health-care-related sectors in Europe, which also fitted in with Beijing's ambition of upgrading China's public health care and pension system.
Unlike China-dedicated funds, MCP aims to invest outside China and tries to introduce deals to Chinese corporates that are keen to expand abroad, sometimes through mergers and acquisitions. Gao said MCP would continue this strategy.
She said the first-round fund-raising of its new fund would close soon.
